Fed bets big in new push to rescue US economy

WASHINGTON - The US Federal Reserve launched another aggressive stimulus program on Thursday, saying it will buy $40 billion of mortgage-backed debt per month until the outlook for jobs improves substantially as long as inflation remains contained.

In an unprecedented step, the Fed's policymaking panel escalated its effort to drive US unemployment lower by tying its unconventional bond buying directly to economic conditions, a move that immediately sparked controversy among its critics.

"If the outlook for the labor market does not improve substantially, the committee will continue its purchase of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability," the Fed said in a statement.

In an additional move that reflects just how concerned Fed officials are about the economy, policymakers said they would not likely raise interest rates from current rock-bottom lows until at least mid-2015. Previously, it had set such guidance at late 2014.